Why you should be using geotargeting

As businesses continue to recover from the pandemic, reaching a wider audience is more important than ever.  By 2024, it is estimated that there will be more than 7 billion smartphone users worldwide. Targeting them should be a key consideration of any business’ marketing strategy. This is where location-based approaches like geotargeting come in. 

What is geotargeting?

Geotargeting is a type of advertising that uses location data to target audiences with messages specific to their locations or geographic areas. This can be for countries, areas of a country, a city or town or even something as specific as a radius around a particular area.

Geotargeting is widely used in digital advertising. This is because it allows businesses to tailor their message to a specific target market, therefore resulting in more relevant messaging and better return on investment (ROI).

All the major ad platforms (Meta, Google etc) offer geotargeting.

How does geotargeting work?

Geotargeting works through geolocation. Geolocation simply refers to the geographical location of a device – such as a smartphone, laptop, fitness tracker or smart speaker – that is connected to the internet. 

Geolocation platforms actively collect data through a device’s connection to GPS and cellular networks. Enabling location services on your smartphone or other device means the geolocation platform can estimate your location, relating to those networks. The more networks that are in the area, the more accurate the location will be. So, it’s easier to pinpoint in well-connected urban areas than rural ones. 

Geolocation data is also collected passively via IP addresses. Internet service providers will know their customers’ IP address and general location. Then, they link these to physical locations in their databases.

This data is not as specific as GPS location data. However, it still gives a good indication for advertisers serving ads based on the nearest town, city or country. 

Advertisers can use social media profiles for geolocation. Many social media platforms allow users to specify their location in their profile. This information can be used to target ads to users who reside in, work in or frequent a particular area.

Cross-referencing these different types of geolocation data can result in more accurate pinpointing of location information. Once the platform has this location data, it’s used to place relevant ads in front of users.

Food for thought

Imagine you run a restaurant specialising in haggis in the Scottish Highlands. You may feel that advertising to the whole of the UK is beneficial as it might drive customers to visit. However, the majority of people that see your ads will have no realistic prospect of attending the restaurant. With geotargeting, your ads platform will serve your ads to people living in, working in or visiting the local area who are more likely to be interested in eating at (and actually attending) your restaurant.

Why use geotargeting?

Thanks to evolving technology, geotargeting is very precise precise. Therefore, it’s a cost effective and practical advertising method. Geotargeting is useful for any business.

But, if you have a brick-and-mortar store or sell a product that is purchased ‘on the go’, (i.e., sandwiches or coffees), this is a particularly useful advertising strategy. You can show ads for your business to users within close proximity. This could be offering a discount, limited time offer or special menu, encouraging them to visit.

You can also exclude the places you don’t want to serve your ads. An example of when this might be relevant is if you are a retailer that can only deliver within Europe. It would make sense to exclude the rest of the world in this case. It prevents you from wasting money and also from disappointing potential customers when you are unable to deliver to them.

You can also use this exclusion principle to prevent competing companies from seeing your ads by excluding the area around their stores. Although, this might also mean you miss out on some potential customers.

Another benefit to geotargeting is that it allows you to tailor the content of your ads to suit the geographic location. For example, an advertiser targeting ads to a range of different countries might alter the content in each to reflect the local language, cultural beliefs, or account for differences such as the local climate. A clothing retailer, for example, wouldn’t want to waste your ad budget targeting people in warmer climates with winter clothing.

Tailoring your ads through geotargeting ensures the ads are relevant to each target audience, leading to increased engagement. Bear in mind, however, that this can come with increased costs due to having to create multiple ads to suit different locations.

In summary

Despite these potential increased advertising costs, geotargeting is a powerful tool for business. It’s a great way to ensure ads are only shown to those who convert, thereby increasing the effectiveness and efficiency of marketing campaigns.

Additionally, geotargeting offers businesses a valuable opportunity to reach their target audience in a more personalised way. In research conducted by Lawless Research, almost 9 in 10 marketers said location-based advertising and marketing resulted in higher sales, followed by growth in their customer base (86%) and higher customer engagement (84%). With statistics like these, it’s no wonder that 95% of global companies already use location-based data in their marketing strategy.

Will your company be next? 

Give it a try – and let us know how it goes.

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